There will be a tighter focus on helping those people needing basic, foundation skills such as improved literacy.

Work and Income will use its knowledge of labour markets to help TOPS graduates find meaningful work.

Sixty percent of TOP's funding will be managed by TEC largely for longer courses.

"It makes sense to target our investment in training so that every dollar spent is spent well, it's about being smarter with what we've got," says Ms Bennett.

Ministers Joyce and Bennett acknowledge the change is a significant shift for providers and MSD and TEC will work with them as they adapt some courses.

"I cannot stress enough that MSD and TEC are committed to ensuring this transition is a smooth one," says Mr Joyce.

MSD is committed to working closely with providers and has the infrastructure to do so immediately.Work and Income and TEC will be contacting all providers to discuss the implementation of the changes.

"Our people throughout the country will be meeting face to face with providers to talk this through, answer questions and address concerns," Minister Bennett said.